Shoe Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,800 shoe stores in the US sell most types of new footwear and related items. Major product categories include women’s footwear, men’s athletic footwear, women’s athletic footwear, and children’s athletic footwear. Shoe stores may also sell clothing and accessories, such as socks, belts, hosiery, and jewelry. The shoe store industry includes national chains, regional chains, franchises, and independent operators.

Managing Highly Seasonal Demand

The shoe business is highly seasonal and driven by the fashion calendar, which generally revolves around fall and spring collections.

Dependence On Foreign Sources

Imports account for over 98% of footwear sold in the US according to the American Apparel and Footwear Association (AAFA).

Industry size & Structure

The average shoe store employs about 29-30 workers and generates $5-6 million annually.

    • The shoe store industry consists of 4,800 companies that employ about 143,000 workers and generate $28.6 billion annually.
    • The industry is concentrated; the top 50 companies account for 82% of industry revenue.
    • The shoe store industry includes national chains, regional chains, franchises, and independent operators.
    • Independent shoe retailers average two to four stores, employ seven workers per store, and carry an inventory worth $250,000 or more, according to National Shoe Retailers Association (NSRA) survey. The average per-pair price is $135.
    • Large companies include Footlocker, Genesco (Journeys, Johnston & Murphy), Caleres (formerly Brown Shoe and parent of Famous Footwear) and DSW (Designer Shoe Warehouse). Large firms may have stores outside of the US or operate the shoe department within another retailer.
                                Industry Forecast
                                Shoe Stores Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 8, 2023 - Footwear Sales to Stabilize Through 2025
                                • Footwear sales revenue is projected to grow at an annual rate of 1% through 2025, according to a report from the NPD Group in Retail Dive. As shoppers feel financial pressures, they are expected to view casual footwear, sneakers, and athletic footwear as necessities and spend less on categories like dress footwear, outdoor shoes, and slippers. Demand will be highest in the first half of 2023 for “casual everyday use” shoes. In 2022, sports leisure footwear sales generated the highest revenue, and fashion footwear sales grew as consumers returned to in-person events. According to NPD analyst Beth Goldstein, “This will be a reset year for the footwear industry. After three years of ups and downs, we can expect sales and price trends will level out as consumers settle into their now-familiar lifestyles and make strategic choices about their must-haves versus their nice-to-haves, as they continue to grapple with macroeconomic pressures.”
                                • Designer Brands, the parent company of Designer Shoe Warehouse (DSW), is building up its owned brand line-up with the recent acquisition of classic sneaker brand Keds from Wolverine Worldwide, according to Chain Store Age. The February 2023 deal is expected to help the shoe retailer reach its goal of doubling its sales of owned brands by fiscal 2026. The acquisition expands DSW-owned brands into the casual and athleisure footwear areas, along with the recent Le Tigre and Topo Athletic purchases. Wolverine is also striking a deal to give Designer Brands an exclusive license for Hush Puppies footwear in the US and Canada. According to Designer Brands' CEO Roger Rawlins, "Today's announcements serve as proof of both the incredible progress we have made on our strategy to double sales of our owned brands by 2026 as well as the ongoing benefits of our relationships with top national brands."
                                • A new survey about boot shopping found that the most popular category was hiking boots (75%), followed by cold weather/snow boots (68%), and fashion boots (65%), according to Footwear Insight. According to the survey of 500 consumers, customers are shopping for boots at outdoor stores (67%), sporting goods stores (63%), online – not affiliated with a brick and mortar store (60%), department stores (52%), online – affiliated with a brick and mortar store (45%), discount footwear chains (28%), and family shoe stores (26%). Features most important in boots are comfort and durability, waterproofness, insulation, price, fashion, sizing, and brand. Winter was the most popular time of year for consumers to wear boots (95%), followed by fall (88%), spring (58%), and summer (30%).
                                • The rate of merchandise returned to retailers in 2022 remained steady, even as retail sales continued to grow, according to a report from the National Retail Federation and Appriss Retail. The rate of return in 2022 was 16.5% compared to 16.6% in 2021. Shoppers are projected to return about $816 billion worth of retail merchandise purchased in 2022. The retail survey found that retailers lose $10.40 in return fraud for every $100 in returned merchandise accepted. Retailers in the survey experienced several types of fraud, including returns of used, non-defective merchandise (50%), returns of shoplifted or stolen merchandise (41%), and return fraud by organized retail crime (20%). The survey also captured online returns data, which were consistent with the overall rate of return. Online return rates fell from 20.8% in 2021 to 16.5% in 2022. Of the $212 billion returned online purchases, about 10.7%, or $22.8 billion, will be considered fraudulent.
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